Correlation Between Link Real and Macerich
Can any of the company-specific risk be diversified away by investing in both Link Real and Macerich at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Link Real and Macerich into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Link Real Estate and The Macerich, you can compare the effects of market volatilities on Link Real and Macerich and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Link Real with a short position of Macerich. Check out your portfolio center. Please also check ongoing floating volatility patterns of Link Real and Macerich.
Diversification Opportunities for Link Real and Macerich
Poor diversification
The 3 months correlation between Link and Macerich is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Link Real Estate and The Macerich in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macerich and Link Real is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Link Real Estate are associated (or correlated) with Macerich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macerich has no effect on the direction of Link Real i.e., Link Real and Macerich go up and down completely randomly.
Pair Corralation between Link Real and Macerich
Assuming the 90 days horizon Link Real Estate is expected to generate 3.09 times more return on investment than Macerich. However, Link Real is 3.09 times more volatile than The Macerich. It trades about 0.23 of its potential returns per unit of risk. The Macerich is currently generating about 0.29 per unit of risk. If you would invest 294.00 in Link Real Estate on September 2, 2024 and sell it today you would earn a total of 125.00 from holding Link Real Estate or generate 42.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Link Real Estate vs. The Macerich
Performance |
| Timeline |
| Link Real Estate |
| Macerich |
Link Real and Macerich Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Link Real and Macerich
The main advantage of trading using opposite Link Real and Macerich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Link Real position performs unexpectedly, Macerich can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Macerich will offset losses from the drop in Macerich's long position.| Link Real vs. Lendlease Group | Link Real vs. Geely Automobile Holdings | Link Real vs. Cars Inc | Link Real vs. INTER CARS SA |
| Macerich vs. SBI Insurance Group | Macerich vs. Universal Insurance Holdings | Macerich vs. Singapore Reinsurance | Macerich vs. Zurich Insurance Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the CEOs Directory module to screen CEOs from public companies around the world.
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